MONTEREY &GT;&GT; The Monterey City Council is being asked to assure the federal government the city is serious about a long-planned senior housing project in the downtown.

The U.S. Department of Housing and Urban Development has threatened to make the city repay about $1.34 million granted the city in 2001 and 2002 to buy five parcels in the 600 block of Van Buren Street for a low-and moderate-income senior apartment project.

In July 2013, the federal housing agency told the city it determined the still-unrealized Van Buren project wasn”t eligible for the money, and the funds would have to be reimbursed.

A council report says that would have “a dire financial affect” on the city, and the project is still being actively pursued.

Subsequent meetings between HUD and city officials allowed the city more time to show progress on the project. The city began seeking formal developer proposals in May and hopes to have a potential developer chosen by mid-August.

Meanwhile, HUD is asking the city to put the land or other collateral up to secure the federal money already put into the project. On Tuesday, the council is being recommended to start a time deposit with $1.34 million by June 30 to ensure repayment, if the project isn”t developed in a timely way.

“Additional time is needed to determine if the developer proposals will be economically feasible and (to) establish a realistic time schedule,” the council report says.

Paying the money back today would delay for years the long-planned 19-unit downtown project, the report says.

Also Tuesday, the Monterey council will consider:

• A request by Councilman Alan Haffa to put on a future agenda a proposal to reform city campaign finance laws. Haffa was unavailable for comment, but materials distributed to the council highlight measures the city of Pacific Grove took in 2006, including a ban on contributions from non-individuals and recusal of council members from decisions affecting contributors who give $250 or more.

• A recommendation to reconfigure the Wharf II warehouse space to allow more room for expanding and new tenants.

• Approving a new Wharf II lease with the Monterey Peninsula Yacht Club. Under the 10-year lease, monthly rent will go from $901 to $2,150.